Charter schools’ self-dealing hurts kids and needs attention

Fordham has worked in Dayton – as a funder, charter-school
authorizer, and charter-school advocate – to push for the creation and growth
of high quality charter schools since 1998. Over the last decade one of the
highest performing charter school clusters in the city has been the Richard
Allen (RA) Schools (RA has three schools in Dayton that serve about 800
children). Over the years I’ve spent time with the leaders of Richard Allen,
visited their schools, and even helped judge their annual debate competition.
In short, I have always been impressed by both the educators and the students
I’ve met and worked with from the RA schools and believe the schools delivered
quality education to students.

It is because of these personal connections to the schools
over the years that I found the recent “Special
Audit of the Richard Allen Academy Schools
” such painful and disturbing reading.
The Special Audit provided a litany of “missing money, missing records and
self-dealing” that has led to $929,850 in findings for recovery. The audit
describes a situation where public dollars were used without any basic accountability
or transparency. It reads as if the schools’ leadership considered the schools
a private operation free of any responsibility for how the state dollars were
spent. There also seemed little understanding as to whom the public resources
were meant to support.

For example, the audit details how the schools contracted with
the Montgomery County Department of Jobs and Family Services to provide summer
and after-school readiness enrichment services to needy Dayton families. The RA
administration, despite receiving public dollars for the express purpose of
providing programs, charged participating families a weekly fee – to be paid in
cash – for attending the after school program. According to the audit, “the
fees were paid in cash. We could not identify any program fees recorded or
deposited by the Schools.”

In response to the audit, Richard Allen officials issued a
statement to the Dayton Daily News that read:

The language chosen for use in the
audit report attempts to create the perception that there was intent to run afoul
of the laws of this state by the parties referenced therein. What the auditors
were tasked with ascertaining was whether the funds expended by the schools
were for a proper public purpose. As stewards of public funds, we would expect
no less. However, we are dismayed by the arbitrary and capricious nature in
which the auditors determined what documentation they would and would not give
credence to.

Such
defiant language might have more credibility if the state auditor were someone
other than Dave Yost. Yost is a
Republican who supports charter schools and school choice generally. He also is
a former prosecutor who knows how to follow the facts. He made his name in
politics
for his vigorous prosecution of political corruption. His stated mission as
auditor is “to protect Ohioans’ tax dollars while aggressively fighting fraud,
waste and misuse in public spending.”

The
problems facing the leadership of the Richard Allen family of schools are
likely just beginning as the auditor has referred many of the findings to the
Ohio Ethics Commission, the Ohio Department of Education, the Internal Revenue
Service, state retirement agencies, and the Montgomery County Department of Job
and Family Services. If the Ohio Ethics Commission, for example, finds that a
violation has occurred, its findings are turned over to the appropriate
prosecuting authority for criminal prosecution.

The
Richard Allen Academy Schools Audit highlights, yet again, the need for Ohio
statute to clarify the roles and duties of school governing boards, school
operators, and school sponsors (aka authorizers). Some of the problems
highlighted in the audit are a result of state law that allows the blurring of
responsibilities and accountabilities across the different authorities
responsible for charter performance. The auditor reported:

As a result of these relationships, the
Schools, their management company, and sponsor are generally operated by the
same individual, the organizations are closely related, financial operations
have been commingled, and management lines have been blurred. The lack of
separation between the Schools, their management company and their sponsoring
organization increases the risk of financial mismanagement, inappropriate
relationships and statutory ethics violations.

This
blurring of responsibilities was the topic of a February 4 Columbus Dispatch editorial that observed:

The greatest weakness in Ohio’s
charter-school system is a lack of clear boundaries between the principal
players in a charter school:

  • The governing board, which creates the school and is responsible
    for it;
  • The sponsor, which is authorized by the state to oversee a school
    and hold the governing board accountable for performance;
  • In some cases, an operating company, nonprofit or for-profit, that
    is paid by the governing board to run the school;
  • And the Ohio Department of Education, which oversees it all.

Legislation
to address these issues has been introduced almost every year since 2005, and
the most recent effort was included in the Senate’s version of the recent
biennial budget. Each time the legislation is presented it gets killed by
self-interested groups that benefit from the current confusion.

The
situation with the Richard Allen Schools is surely a sad one for the hundreds
of children and their families who attend the schools, for the dozens of
teachers in the buildings who are working hard every day to provide first-rate
instruction to their students, and for Dayton – which still has too few
high-performing elementary school options for its children. Yet, maybe some
good can come out of this if the General Assembly finally creates a system of
reasonable checks and balances for Ohio’s charter schools.

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